Local officials hope to streamline how area lodging tax dollars are collected, and to capture revenue that may currently slip through the cracks.
Those were two key highlights of a report to city officials Tuesday by former council member Paul Kess, who remains the city’s representatives on the Ely Area Lodging Tax Board.
Kess said that the board, which also includes representatives from Morse, Fall Lake and area unorganized townships, wants the state of Minnesota to take over collection of the lodging tax.
The tax has been administered for years by Cook County, which in turn funnels the money back to the board.
“It’s worked for awhile but Cook County is not highly staffed and there’s always an issue of timeliness,” said Kess. “And businesses are used to filing their sales tax with the state.”
Kess said it makes the state a better fit for collecting the lodging tax as well, via the Minnesota Department of Revenue.
Such an arrangement would have to be negotiated with the state, but Kess noted “there are other lodging tax entities that contract with the state to do this.”
“It would make it a normal process to add lodging to that collection system,” said Kess. “We are discussing that and moving forward and I hope the lodging tax board will move in that direction.”
More than $300,000 per year is generated by the lodging tax, but Kess said that number could grow from a better handle on revenues generated by short-term lodging options such as vacation rentals.
The lodging tax board has contracted with a firm in an effort to capture more of that revenue “so they too can be included in the process of paying the lodging tax. That’s not always the case.”
Harold Langowski, Ely’s city clerk-treasurer and operations director, said the bid to encompass all vacation rentals is a “great move.”
“I think a bunch will be found,” said Langowski.
The Ely Tourism Bureau currently receives lodging tax funds to promote the Ely area, but Kess said that the board is considering proposals to send some of those funds elsewhere.
The city of Ely is seeking $20,000 in funds to help maintain the new trailhead building.
“The city of Ely stepped up to get the trailhead built,” said Forsman. “And helping to fund the operation is something that should be considered.”
